Peppa Pig owner Entertainment One saw shares fall 10% despite a surge in US sales for the children's franchise and more plans for its worldwide expansion.

The UK-listed global firm reported a 3% fall in revenues for the nine months to the end of December with strong growth in its television arm offset by a decline in its film business.

Entertainment One took control of the future development of Peppa Pig when it completed the acquisition of 70% of maker Astley Baker Davies in a £140m deal last October - with 52 new episodes being produced.

It said the children's character remained the leading pre-school brand in the UK, Spain, Australia and Latin America.

Sales of merchandise in the US continued to be "exceptionally strong", especially through the Toys R Us chain.

Retail sales were expected to show a rise of 275%, with toys up 230% and clothes 300% ahead, the company said.

Canada and France are next in line for a Peppa retail launch. Markets in South East Asia and China were continuing to develop and expected to see strong growth in the next financial year.

Entertainment One's TV revenues were up 39% but film was down 14% reflecting tough market conditions, fewer film releases than the year before and "some recent title underperformance".

Chief executive Darren Throop said: "The group continues to deliver very strong growth across its television division - with both eOne Television Studios and the Family businesses performing well in the period.

"Whilst the film division continues to experience trading challenges, its restructuring and the exciting committed film release slate for the next financial year provide a positive outlook for film."